Libya's largest oil port seized in blow to production surge

CAIRO (Bloomberg) -- Libya’s biggest oil port was seized by an armed group, dealing a blow to the North African country as it seeks to revive production of its most important commodity. Brent crude futures climbed.

Benghazi Defense Brigades, a militia that’s not allied to the United Nations-backed government in Tripoli, took control of the Es Sider terminal on Friday afternoon, according to people with knowledge of matter who asked not to be identified because they aren’t authorized to speak to the media. The facility had previously been under the control of eastern-based military commander Khalifa Haftar.

“That is a considerable blow to Haftar,” said Mattia Toalda, senior policy fellow at the European Council on Foreign Relations. “We have to see if there is an immediate impact on exports. But for confidence in Libya’s production it’s a blow.”

The clashes show just how vulnerable Libya’s recent oil-production surge is to conflict that escalated in late 2014 but that had shown signs of calming in the past few months. The nation pumped about 700,000 bpd in February, almost doubling from a year ago, according to information compiled by Bloomberg.

Brent crude futures climbed as high as $55.86 a barrel following the port’s seizure. They were at $55.64 at 4:19 p.m. in London.

Bushra, the Benghazi Defense Brigades news website, published photos showing their fighters at the Ras Lanuf airport.

While the port was under his control, Haftar had allowed to let Libya’s National Oil Corp., part of the Tripoli-backed government, use Es Sider for oil exports.

Earlier, workers at the terminal had fled to nearby Ras Lanuf as Haftar’s forces sought to repel the attack, Saad Dinar, head of the oil workers’ union in eastern Libya, said by phone.

The Benghazi Defense Brigades stronghold is in Jufra, on the western edge of nation’s oil crescent, rather than the city of Benghazi, which is in the east.

There have been skirmishes in the area between the two sides before. Friday’s fighting marks an escalation and highlights threats to the North African country’s efforts to restore its crude production following two years of conflict.

Libyan oil production has been rising, with shipments from key ports resuming after many months of conflict. The more it pumps, the greater the pressure on other members of OPEC to curb supply in order to eliminate a global oil glut.